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For the 24 hours to 23:00 GMT, the USD declined 0.67% against the CAD and closed at 1.2648 on Friday.

In the Asian session, at GMT0300, the pair is trading at 1.2656, with the USD trading 0.06% higher against the CAD from Friday's close.

The pair is expected to find support at 1.2615, and a fall through could take it to the next support level of 1.2574. The pair is expected to find its first resistance at 1.2722, and a rise through could take it to the next resistance level of 1.2788.

Ahead in the day, investors will closely monitor Canada's existing home sales data for June.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

STOCKS

Dow (21637.74, +0.39%) has closed above 21600, breaking a major long term resistance and in case it holds, we could see the rally to continue towards 22000 which could be an immediate resistance. A small dip from 22000 is possible before it resumes its rally towards 22500 and higher in the longer run.

Dax (12631.72, -0.08%) rose sharply last week and could possibly continue towards 12750-12800 before again coming back towards current levels. Near term looks bullish.

There have been some talks of concern over tightening of financial regulations. Shanghai (3189.48, -1.02%) fell to levels near 3139 in the morning trade before again recovering to levels near 3190. Immediate support is seen near 3170 which if holds could keep the prices higher for the coming sessions. A bounce back towards 3200 and higher is on the cards for the near term.

Nikkei (20118.86, +0.09%) needs to bounce back from current levels to move up towards 20300 and higher; else a break below 20000 is possible initiating fall over the coming sessions. For now our preferred view is to see a bounce towards 20300.

Nifty (9886.35, -0.05%) has scope of moving up towards 10000 in the coming sessions before it comes down to 9800. Near term looks bullish.

COMMODITIES

Recent weakness in Dollar index (94.95) has impacted positively across all the commodities. Gold (1231) has managed to break its recent short term down trend channel and hovering around its crucial resistance of 1232. A close above that could open up 1245 and 1258 levels respectively. Silver (16.02) is still within its downward channel though there are chances of a upside rally towards 16.54 regions.

Copper (2.69) moved marginally higher within the trading range of 2.66-2.78. We have been bullish on copper since 22nd of June and we will remain so while it is trading above 2.55 levels. A close above 2.78 regions could open up 2.85 levels as well.

The energy pack had closed higher and it might remain stable while above 47.70 (Brent) and 45 (WTI) respectively. Most factors are supportive for oil at the moment. These Supports has held on weekly basis and Brent (49.06) and WTI (46.67) has moved up in line with our expectation. We think some more rises towards 51.20 and 47.70 is possible within a couple of days.

For the near term, Brent and WTI seems to be trading in a 47-51 and 45-48 range now and the medium term ranges are now 44-52 and 42-50. The big question is whether we will see a rise past 52 (Brent) and 50 (WTI) or not by the end of July and to get a clue on that, we will keep an eye on U.S Weekly crude oil inventories. But we will remain bullish in near term while Brent and WTI are trading above 47 and 45 regions on an closing basis.

FOREX

Weak US economic data increased the doubt over any further Fed rate hike this year and kept the pressure on Dollar unchanged.

Dollar Index (95.18) has broken below the support of 95.50-40 in line with expectations and now much lower levels of 94.00 comes into consideration. The trend remains firmly down with 96.50 as a major resistance in the near term.

Euro (1.1462) has broken above its immediate resistance of 1.1440 on the back of the strengthening German 30Yr yields as discussed last week. Cautious stance is recommended in the long term resistance zone of 1.1500-1.1600 despite the firm uptrend till now.

Dollar-Yen (112.63) failed to hold above 112.65 and weakened further. The current correction may extend to 111.50-00 if 112.30 is unable to hold. With other majors in a firm footing, the chances of seeing 111.50-00 look stronger.

Aussie (0.7815) has seen a major breakout as it tested the 15-month high of 0.7835. If it can sustain above 0.7700 in the any correction in the next few sessions and the breakout doesn’t turn out to be a false one, then it can be taken as a long term shift to the bullish side and the immediate target would be 0.8150-75.

Pound (1.3101) had a similar major breakout above the resistance zone of 1.3030-50 to register a 10-month high and now may rise towards 1.32 and later, 1.34.

Dollar-Rupee (64.45) closed absolutely flat in the last session but our view remains unchanged as we look forward to 64.20 being tested this week on a break below 64.40-35.

INTEREST RATES

The US yields are almost stable. Note that they are all trading below crucial long term resistances and could be bearish for the medium term. The 10-5YR (0.46%) could face some rejection from 0.4625% and could come off in the next few sessions.

The UK yields have started to rise again and look bullish for the current week. The 10YR (1.31%) could move up towards 1.40% while the 30Yr (1.83%) and the 5YR (0.69%) can move up towards 1.90% and 0.75% respectively.

The UK 10-5Yr (0.62%) is testing resistance near current levels and if that holds, a corrective fall is possible in the coming sessions.

The German yields are trying to rise and could move up slowly in the coming sessions.

A snapshot view of large speculative positioning from the weekly CFTC report and analysis of related futures markets.

The Yen experienced the largest weekly change to positioning, with +34.2k shorts added to drag net exposure to its most bearish level since June 2016.

Canadian Dollar bears closed -18.9k contracts and added +11.8k bullish positions, to send net short exposure to its lowest level since March.

The US Dollar Index is on the verge of switching to net short, although price action following the report suggests this may have already occurred.

DXY: The S Dollar Index is on the verge of flipping to net short. Price action following Tuesday's close (when report is compiled) suggests we may already be net short as the index touched a 10-month low by the close. The rise of gross short positioning takes it to its highest level since Q1 2016 and if data continues to disappoint, then DXY is likely headed for 93 over the coming weeks.

EUR: The Euro continued its ascent, helped higher by a dovish Fed and weak US inflation. 116 is the next target and we will seek to buy the dips whilst above last week's low. The steady stream of gross longs continues to rise and gross shorts remains subdued, which is the sign of a healthy trend. However, a quick glance at the charts suggests commodity currencies benefitted from the weak US Dollar more than Euro did so, whilst we remain bullish on Euro, it is not necessarily the best outperformer around a weaker US Dollar.

JPY: The Yen respected 8,745 support to further delay the potential double top. If we ray from here then we can consider a triple top of triangle formation. Yet speculative positioning appears to be front running a bearish break. Gross short positioning has risen sharply these past three weeks which has dragged the net short interest to its lowest level since 2015. Fundamentally we are bearish the Yen so now await the technicals to confirm what the bearish speculators already suspect – a bearish follow-through over the coming week/s.

AUD: The Australian Dollar jumped to the 2016 high on Friday after making light work of the neckline. A break of 0.7818 appears imminent, which then puts 0.80 and 0.8151 in focus. That recent gains have been seen as gross longs also rise adds extra confidence in the move. However, we also know the RBA do not want their currency to rise too much so there may be concerns of an easing bias to return if the rally moves too far too fast. Technically further gains appear more likely on the near-term so it remains in our bullish watch list this week.

CAD: The Canadian Dollar has seen a heavy reduction of gross short exposure, some of which has flipped to the long side. What was originally a rally fuelled by short-covering is now supported by fresh bids. The BoC raised rates last week, yet also surprised markets with a hawkish statement. So, like AUD, CAD remains in our bullish watchlist for the week as technicals and fundamentals remain supportive.

How about that Aussie Dollar!

I've had resistance drawn as a zone up here as there are multiple swing highs that are hitting a couple of different levels and the Aussie has continued to be rejected off resistance time and time again.

Taking a look at today's Daily chart however, you can see that price has rallied and tapped the highest extreme of the zone. Just another touch to add to the collection!

AUD/USD Daily:

But let's not get too carried away just yet.

The momentum behind this type of move is exactly why we wait and see if the higher time frame resistance level can actually hold before selling any retests of short term support.

Confirmation is the key factor in avoiding being hit by the freight train of bullish momentum that is just waiting to clean up faders that get their timing ever so slightly out.

GOLD - With the commodity continuing to retrain its recovery, more gain is envisaged. On the downside, support comes in at the 1,210.00 level where a break will turn attention to the 1,200.00 level. Further down, a cut through here will open the door for a move lower towards the 1,190.00 level. Below here if seen could trigger further downside pressure targeting the 1,180.00 level. Conversely, resistance resides at the 1,230.00 level where a break will aim at the 1,240.00 level. A turn above there will expose the 1,250.00 level. Further out, resistance stands at the 1,260.00 level. All in all, GOLD looks to recover further higher.

AUD/USD breakout attempt

Price rallied aggressively in the last days and touched fresh new highs, is strongly bullish on the Daily chart and looks unstoppable. Will increase further if the USDX will slide further, the index has closed the former week at 95.10 level, much below the 95.45 previous low. USDX is under massive selling pressure on the Daily chart, but remains to see what will happen because is very close to hit a major dynamic support.

AUD/USD will be driven by the fundamental factors in the morning, the Chinese data will have a high impact on the Aussie's movement. The Chinese GDP could increase by 6.8% in the second quarter, less versus the 6.9% growth in the former reading period, while the Industrial Production may increase by 6.5% in June, could remain steady at 6.5% for the third month in June.

Moreover the Retail Sales could increase by 10.6%, less versus the 10.7% growth in the former reading period , while the Fixed Asset Investment could increase by 8.5%, less versus the 8.6% estimate.

Price edged higher and is very close to hit the 0.7835 major static resistance, could touch also the upper median line (uml) of the ascending pitchfork, where he could find temporary resistance. The perspective remains bullish as long as the rate is trading within the ascending pitchfork's body.

Will be very important to see how will react when will touch the 0.7835 static resistance, right now we don't have any overbought sign. Technically, a minor drop is favored after the impressive rally, but is premature to say that we'll have a corrective phase in the upcoming days.

We'll have a selling opportunity only if the rate will fail to breakout above the 0.7835 upside obstacle and if will be rejected by this level. I want also to remind you that a valid breakout above the mentioned resistance will confirm a further growth.

USD/JPY trading in the red

Price has turned to the downside after a false breakout above an important static resistance area, continues to move sideways and may will be better to stay away till will have a fresh trading signal.

Is trading right above the 112.50 psychological level and was very close to react and retest a dynamic support level (resistance turned into support). The current decrease is natural after the false breakout above the 23.6% retracement level and after the failure to reach the third warning line (WL3). The Yen will appreciate further if the Nikkei stock index will drop and will stabilize below the 20058 level.

NZD/USD buying opportunity?

The pair increased sharply in the previous week and has managed to close above a major static resistance. The breakout needs confirmation, a minor consolidation above the 0.7324 broken static resistance will bring us a good buying opportunity.

Price will resume the upside movement only if will have enough energy to close above the 0.7367 previous high. Personally, I would like the rate to come to retest the fourth warning line (wl4) before will increase further.

EURUSD - The pair continues to hold on to its medium term uptrend with more strength envisaged in the new week. Resistance comes in at 1.1500 level with a cut through here opening the door for more upside towards the 1.1550 level. Further up, resistance lies at the 1.1600 level where a break will expose the 1.1650 level. Its daily RSI is bullish and pointing higher suggesting further strength. Conversely, support lies at the 1.1400 level where a violation will aim at the 1.1350 level. A break of here will aim at the 1.1300 level. All in all, EURUSD faces further upside pressure.

EURGBP - The cross continues to retain its corrective pullback threats selling off the past week and opening the door for more weakness. Support lies at the 0.8700 level where a violation will turn focus to the 0.8650 level. A break will expose the 0.8600 level. Resistance resides at the 0.8800 level where a violation if seen will turn risk towards the 0.8850 level. Further up, resistance resides at 0.8900 level followed by the 0.8950 level. All in all, EURGBP remains biased to the downside on bear threats.

The technical breakdowns in the US dollar after Friday's weak data releases raise deeply troubling questions about the currency. The Australian dollar was the best performer last week while the US dollar lagged. CFTC positioning showed the completion of the CAD-whipsaw. The Premium Insights closed out of the GBPUSD long with 120-pip gain and issued a new set of charts on the pair. A new JPY trade was also added earlier in Friday.The technical breakdowns in the US dollar after Friday's weak data releases raise deeply troubling questions about the currency. The Australian dollar was the best performer last week while the US dollar lagged. CFTC positioning showed the completion of the CAD-whipsaw. The Premium Insights closed out of the GBPUSD long with 120-pip gain and issued a new set of charts on the pair. A new JPY trade was also added earlier in Friday.

You can indeed fight the Fed. Betting against the dollar this year has been the best FX trade, as it has over the last week. Policymakers' insistence that growth and inflation are picking up has been repeatedly undermined by soft data.

On Friday, retail sales and CPI data missed estimates and the market threw in the towel. The dollar was beaten up across the board and finished on the weekly lows. The lack of buyers at the lows points to more trouble ahead. In addition, a few dollar charts are breaking down. On Friday, cable rose to the highest since September 2016. Remember, the UK is facing political uncertainty, Brexit uncertainty and poor economic data.

NY Fed's Q3 2017 Nowcast GDP forecast remains at 1.8% and Q2 GDP forecast revised down to 1.9% from 2.0%.

Australia has also struggled this year but on Friday broke above a double-top at 0.7750 and finished the week just a handful of pips away from the 2016 high of 0.7835. CAD, EUR and everything else but USD/JPY is also in a precarious position.

Ultimately, it's still tough to bet against the Fed because they're only a few good data points away from raising rates again but the calendar is light until the final few days of July and that argues for more dollar weakness ahead.

CFTC Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR +84K vs +77K prior GBP -24K vs -28K prior JPY -112K vs -75K prior CHF 0K vs 0K prior CAD -9K vs -39K prior AUD +37K vs +32K prior NZD +32K vs +29K prior

The deeply misguided CAD-short trade has virtually been erased. The market piled into bets against the loonie on signs of trouble in the Canadian housing market the story proved to be a canard and the Bank of Canada massacred the trade. Ultimately, the market will get long CAD on signs of rising rates but it will need to lick its wounds first.

The other development is the shift to yen shorts. That's something we focused on last week. The BOJ is the only central bank that isn't making growing hawkish shift, and we learned on Thursday that inflation forecast might even be cut. Those shorts are likely in it for the long haul.

US Dollar: Swoon to Swoon

Friday's US data led to more USD selling as both US CPI and retail sales for June disappointed.All too familiar themes ensued with the S&P stretching to record highs as the US ten year yields toppled to 2.33 % on a dovish Fed interpretation. And with the odds of any near term US rate hike extinguished, G-10 currencies soared as the AUD, EUR and CAD all established new 2017 high water marks.

The main hurdle to further Fed tightening is inflation, and it will continue to play the decisive role in central bank policy and will ultimately decide the direction for global macro markets throughout the remainder of 2017.

With less than a 50 % December rate hike probabilities priced in and with no supportive Fed speak on the calendar before July 26th, the dollar could struggle. Even more so given the lack of any top tier data to swing sentiment as dealers will be limited to US housing and PMI as data sources, only secondary metrics. There's simply not enough meat on the bone on these US economic data points to push December probabilities much beyond a 50:50 call even on stellar prints. However with five crucial months of inflationary data to go before December's debatable Fed rate hike, the inflation as a transitory debate has a long way to play out yet.

In the absence of any major dollar drivers. G-10 will turn to the latest monetary policy musing by ECB and BoJ, which hold their respective policy meetings on Thursday.

On the one hand, we have the ECB that spooked the bond markets asserting deflationary forces has been conquered. But given the aggressive bond sell off that ensued, the ECB is more likely to temper expectations unfurling some of those market reactions to Draghi's hawkish delivery. Only a big upside surprise in Eurozone CPI(Monday) would be needed to elevate the policy meeting theatrics.

On the other hand, the BoJ found themselves back in the spotlight when they threw a bridle on Yen interest rates with YCC (Yield Curve Control) by conducting an aggressive fixed-rate JGB purchase operation last week. The BoJ is determined to maintain accommodative policy as the JPY NEER is nowhere close to levels that would suggest a policy shift from the BoJ. But given the global bond markets aggressive sell off on the wake of the hawkish central bank narratives, the Fed and the ECB will, in fact, welcome the BoJ policy direction as this will keep the global bond market sell off in check as well the market's implied tightening trajectory from running amok.

Given the market's reaction to only a central bank tapering directive, the real litmus test is when the ECB and FED stop buying bonds. It will happen, and It's Goodbye Yellow Brick Road as far as easy money is concerned

China retail sales, industrial production and GDP data will be the key focus for AUDUSD and NZDUSD traders today. Growth is expected to have cooled to 6.8 percent in the second quarter as Beijing tightens the screws on financial risks, while administrators continue to thwart property speculators and try to reduce pressure on asset bubbles reigning in unbridled credit markets.

EURO

The Euro is trading in rarified air on anticipated shifting yield curve differentials as opposed to anything else suggesting the EURO may slip ahead of this week's ECB meeting as speculative positions are a bit stretched to the top side.

Japanese Yen

Japan is closed for Marine Day day today, but this week the markets will be focused on the BoJ and their anticipated upgrade to the economic assessment. However, given humdrum inflation developments, there's little chance the BoJ will make a move towards monetary tightening.

Australian Dollar

Much to the RBA's chagrin, the weak USD storyline has sent the A$ dollar soaring despite an apparently dovish RBA. Sure there are some indications the economy is picking up, but this does not necessarily mean a call to action for the RBA. However, positioning does suggest the contrary as some start pricing RBA rate hike expectations later this year.